We’re nearing the end of the voting season for this year, and now more than ever it’s important to demand clarity in what we’re voting for when it comes to Voter-Approval Tax Rate Elections—VATREs.  

VATREs are what local governments—like school districts, special purpose districts, and cities—use to ask the public for huge tax hikes. Today, there are more than 40 different VATREs being decided right now and unlike bond elections, which oftentimes go towards large capital improvement projects, these tax increases can be used for just about anything the government wants. And it’s a safe bet that the public doesn’t understand much of this. 

 As an example, Austin ISD has the following VATRE up for consideration: 

RATIFYING THE AD VALOREM TAX RATE OF $0.9505 PER $100 VALUATION IN THE AUSTIN INDEPENDENT SCHOOL DISTRICT FOR THE CURRENT YEAR, A RATE THAT WILL RESULT IN AN INCREASE OF 8.3 PERCENT IN MAINTENANCE AND OPERATIONS TAX REVENUE FOR THE DISTRICT FOR THE CURRENT YEAR AS COMPARED TO THE PRECEDING YEAR, WHICH IS AN ADDITIONAL $184,628,049. 

Wow, that’s a lot of text. What does it even mean? 

First off, let’s look at “Ratifying the ad valorem tax rate of $0.09505 per $100 valuation in the Austin Independent School District for the current year.”  

This part means that Austin ISD is asking us to: 

  1. Ratify—or vote Yes or No—on the adoption of a new tax rate;  
  2. Decide whether the tax rate of  $0.9505 per $100 of value is an appropriate amount, without telling anyone what the current rate is (i.e., $0.8595 per $100 of value); and  
  3. Choose the tax rate without knowing its impact. According to the district’s latest efficiency audit, the adoption of this tax rate will increase the average homeowner’s property tax bill by around $500 annually. That figure, of course, doesn’t account for the $305 tax increase already approved by the Board nor the higher prices people will pay at everyday stores as businesses pass along the increased costs.  

Now, let’s look at, “A rate that will result in an increase of 8.3 percent in maintenance and operations tax revenue for the district for the current year as compared to the preceding year, which is an additional $184,626,049.” 

There’s a lot of extra words in there, but it means essentially this: 

  1. The proposed tax rate will bring in an extra 8.3% in new tax revenue, which translates into a $184.6 million cash grab; and  
  2. There’s no explanation why.  

But let’s not skip over that first part too quickly because a $184 million tax hike is a lot of extra money for the government’s coffers!  

Now, I can already hear the critics crying foul that that figure doesn’t account for the money that Austin ISD will lose to recapture. But that fight is for another day because, ultimately, a tax increase is a tax increase is a tax increase. 

However, what’s more important in this VATRE discussion is that there’s no real obligation on the part of Austin ISD to use the money for anything specific, at least as it’s presented to voters (the Board and the teacher union may have other arrangements apart from the proposition). They’re essentially asking for the money, and voters will say yes or no. Unlike bond propositions, where the dollars must flow into certain categories of expense, the VATRE is essentially a blank check.  

In other words, Austin ISD can use this money on whatever it wants. In all of the promotional materials, Austin ISD has said that they plan to use some of the money towards teacher pay raises: “Austin ISD plans to spend about $17.8 million on a compensation plan that includes market adjustments for most teachers and staff with the highest increases going to our most experienced teachers.” [emphasis mine] 

But that’s just their plan. They’re not legally bound to it, and if Austin ISD voters approve Proposition A, there’s no real requirement per the proposition language that Austin ISD give their teachers pay raises—they could spend it on something else, give other staff pay raises, or chuck it in their savings account (again, absent any pre-existing arrangements).  

This is just one reason why VATREs need serious reform—people need to know that this is a tax increase, and people need to have some guarantees that the local governments will spend the extra money on what they say they plan to spend it on. Otherwise, we’re just giving them a blank check—and they can do pretty much whatever they want with it.